U.S. growth in 2015 is expected to continue at a modest 2.6–2.8 percent. According to projections published by the Conference Board, global growth should hold at 3.4 percent barring major geopolitical upheaval.
National long-term growth depends in part on how well the global economy recovers and stabilizes. At this point, Russia’s economy is suffering from high inflation and currency devaluation. Japan’s prime minister approved a $29.1-billion stimulus package at the end of 2014 to help move the country out of recession. Greece’s internal politics could destabilize economics in the short term. Overall, the global economy is still trailing behind the U.S. economy in terms of growth. Although the United States bears the signs of a strong economy at the beginning of 2015, this status hinges on our ability to trade with global partners and stimulate more growth.
Idaho Labor Market
Idaho’s labor market is improving as unemployment is dropping and is now under 4 percent. This is the first time Idaho’s unemployment rate has dropped below 4 percent since March 2008.November saw 15,000 new hires, mostly to fill job openings made available because of retirements, and the Idaho economy added 12,000 jobs compared to November 2013. Nationally, nonfarm payroll employment rose by 321,000—well above the 224,000 that the economy has averaged for the past 12 months. Despite this job growth, the national unemployment rate remained unchanged at 5.8 percent.
How is it possible for an economy to experience both high job growth and a stagnant unemployment rate? Since people who are not actively looking for a job are not included in the labor force (according to the U.S. Census Bureau’s calculations), one explanation is that formerly-discouraged workers are returning to the job market. Seeing an improving economy and correspondingly improving job prospects, some of these workers are looking for work again. While this is undoubtedly good news for those workers and for the economy, it creates additional competition for jobs and keeps the unemployment rate higher than it otherwise might be.